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Apr 19, 2016

Twenty20 license.

New overtime rules will hurt kids

By Fredrick M. Hess

A well-meaning push by the U.S. Department of Labor to rewrite the nation’s overtime rules could cripple the ability of mission-driven organizations to do good work. While Americans work to put bread on the table, that’s not always their only motivation. In fields ranging from community health services to after-school programs, a wealth of impassioned staff throw themselves into their work for modest pay because they are eager to make a difference.

Vital organizations depend on the goodwill and passion of young people and more than a few others who choose to work long hours coordinating tutoring programs in rural Mississippi or community heath efforts in Chicago for $30,000 a year. These may not be “typical” employees, but they are a real and crucial thread in the American tapestry.

Currently, if a salaried employee earns more than $23,660 a year, employers are not required to pay overtime — time-and-a-half — for any hours worked beyond 40 per week. The Labor Department now proposes to raise that threshold to $50,440 a year, a change expected to affect about 5 million workers. The Office of Management and Budget could approve the proposal as early as this month.

The appeal of the higher salary threshold, only the second time it would be raised since the 1970s, is self-evident. Labor Secretary Tom Perez announced it by telling the touching story of a Massachusetts discount retail store manager working long hours with no overtime pay. Yet while it’s easy to empathize, we should also consider the unintended consequences, particularly on organizations serving low-income and at-risk youth.

The nation’s 7,000 charter schools, serving 3 million students, are a good example. The best among them are mission-driven communities which rely on the generous commitment of teachers, administrators, and support. This has helped schools like KIPP and Uncommon Schools deliver eye-popping results for at-risk students even while receiving, nationally, $3,800 per pupil less than local district schools.

Teachers won’t be affected by the new rule, due to a “professional” exemption for teachers, clergy, architects, and the like. The administrative and support staff will be affected the most. The majority of charter schools operate on tight budgets, with far fewer support staff than most district schools, and the National Alliance for Public Charter Schools notes that these employees manage a wide range of tasks, from school data and regulatory compliance to school safety, building issues, and family and student communication.

These crucial duties often require urgent attention and offbeat work hours. While everyone would like to see these hard-working staffers earn more, employees of these shoestring operations know that operational flexibility and low costs are essential elements of the “business” model.

For high-performing charter schools, agility is a key to meeting student needs. These school go to great lengths to offer extended hours, go out into the community and connect with families. Because charters are stretched in terms of staff and money, the careful monitoring of time will hamper these efforts while also imposing heavy new compliance burdens.

Most charter schools will not be able to afford paying overtime under the new rule and will ask employees not to exceed 40 hours per week. For an administrator, the safest way to follow the law and keep to a tight budget is to rely on time clocks, require all support staff to arrive and depart at the same time, and minimize non-routine activities and employee choice.

While the desire to protect struggling workers is admirable, the current proposal may benefit some low-income earners at the expense of many low-income children. More broadly, it threatens to limit the ability of impassioned employees to throw themselves into the kinds of mission-driven organizations that President Obama has so often celebrated. This can’t be what the Labor Department intended. There are various possible solutions, including creating a new class of exemptions and lowering the new salary threshold. But they all require that the administration look before leaping to make these changes.